World’s top companies are realizing AI benefits. That’s changing the way they engage Indian IT firms

Global Leaders Transform Outsourcing Strategies Amid AI Adoption

In recent years, leading multinational corporations have begun to fundamentally reevaluate their partnerships with Indian IT service providers, driven by the transformative power of artificial intelligence. This technological shift is prompting a move away from conventional fixed-price outsourcing arrangements toward more flexible, performance-based models.

The influence of AI is particularly evident in India’s $280 billion IT services sector, where the focus is shifting from labor-intensive processes to accelerated project delivery. As more companies recognize the efficiency and cost-saving advantages offered by AI-driven workflows, they are exploring alternative contract structures that better align with these technological advancements.

Many Fortune 500 firms are now considering time and materials agreements—contracts that bill based on the actual hours worked and resources utilized—allowing for greater adaptability and transparency. This approach enables corporations to leverage AI’s capabilities effectively while managing outsourcing partnerships in a more dynamic and results-oriented manner.

As this shift continues to evolve, Indian IT providers will need to adapt their service models to meet the changing expectations of their global clients, who are increasingly prioritizing innovation and speed over traditional cost structures.